IEA – Gas Market Report, 1Q 2024

The International Energy Agency (IEA) has released its quarterly Gas Market Report for the first quarter of 2024. The report highlights that despite tighter supply fundamentals, natural gas markets experienced a gradual rebalancing in 2023. Demand reductions in Europe and mature markets in Asia helped soften the impact of the gas supply shock in 2022. However, prices remained high in both Asia and Europe, though they did come down significantly compared to previous years. Looking ahead to 2024, the report predicts a return to strong growth in natural gas markets, driven primarily by the industrial and power sectors in fast-growing economies in Asia, as well as gas-rich countries in Africa and the Middle East. The expectation of average winter weather conditions in the Northern Hemisphere after an exceptionally mild 2023 is expected to increase demand for space heating. While high inventory levels and an improving supply outlook provide some reassurance for 2024, there are several potential factors that could create market tensions and fuel price volatility. These include geopolitical tensions, rising shipping constraints, delays in LNG projects, and adverse weather conditions. The report also emphasizes the importance of security of supply for natural gas and the need for international cooperation in assessing and implementing flexibility options along gas and LNG value chains. In addition to market developments, the report includes a spotlight on greenhouse gas emissions along gas supply chains, highlighting initiatives undertaken by major natural gas and LNG producers and consumers to reduce emissions. The report also covers policy and market developments related to biomethane, low-emissions hydrogen, and e-methane as part of the IEA's Low-Emissions Gases Work Programme.